For many, owning their first home is a lifelong dream and a significant milestone. However, like any new experience, being a first-time homebuyer can come with waves of uncertainty and you may catch yourself second-guessing your decisions at some point.
That’s why it helps to follow a proper guide and process so you can gain confidence when going through the process of securing the home of your dreams. In that regard, proper planning comes with interviewing realtor options, looking at houses, negotiating bids, and of course, qualifying for a mortgage.
What It Means to Plan for Your Home Buying Journey
When it comes to buying a home, getting pre-approved is one of the best ways to simplify your buying process and gives you buying power confidence. With a pre-approval, you get to know how much you can borrow with minimal risk, allowing you to remain financially stable throughout this home buying journey.
For this reason, it’s best to work with a reliable mortgage agent to ensure that your financial status is considered; you’re choosing the right deal that can help you in your buying process.
If you’re thinking of getting a mortgage pre-approval, there are a number of things you need to consider. To make things easier for you, we’ve listed the dos and don’ts of the mortgage pre-approval process. Let’s get to it!
The Dos: Mortgage Pre-Approval Tips You Should Know
- Apply for Mortgage Pre-Approval: Some people think that contacting a realtor is the first step in buying a home. But in reality, the first thing you need to do is to get your mortgage pre-approved. This is because when you find a home you like, you need to move fast. Being approved removes the extra steps in the mortgage process and lets you know how much you can afford when buying a home.
- Window Shop for Pre-Approval Rates: Just like hunting for different homes before finding the perfect one, you should do the same when dealing with mortgage rates. Proper research, comparing rates, and speaking to a mortgage agent can help you find a mortgage rate that will work for you based on your financial capabilities.
- Compile All Your Documents: There are a bunch of documents required when you apply for a mortgage pre-approval. For these reasons, it’s best to gather all your documents and keep them organized in a folder. Ensure you have all identification documents, bank statements, insurance and investment accounts, proof of assets, proof of income, and more.
The Don’ts: Mortgage Pre-Approval Mistakes to Avoid
- Don’t Get Pre-Approved Over Your Budget: One of the biggest mistakes first-time homebuyers make is getting their pre-approval up to their maximum purchasing price. Ideally, you want to calculate how much you can afford monthly and go from there.
- Say No to Big Purchases: Once you’ve submitted documentation to your loan officer, your financial situation should change from pre-approval until your loan’s finalization. This means you should avoid major purchases that can change your debt service ratios.
- Hold Off from Applying for New Credit: When you’re getting your mortgage pre-approved, don’t apply for new forms of credit, such as a personal loan or credit card. Your debt level and available credit play a huge role in mortgage approval, so when this increases, it can affect your pre-approval.
- Don’t Quit or Change Jobs: As much as possible, you want to ensure you have a steady flow of income. With that being said, avoid changes in your employment status after you’ve been pre-approved.
The Bottom Line: Planning Ahead Promises a Worry-Free Home Buying Process
Planning can change the way your home buying process pans out. Doing proper research, speaking to a mortgage agent, and following the right steps can help you get pre-approved quicker, helping you move forward into planning your home buying process.
How Can We Help You?
Finding and buying a home can be tricky, especially when you put your finances into the picture. Fortunately, with the help of Ottawa Mortgage Services, buying your home for the first time won’t be such a pain.
Our expert mortgage agent in Ottawa Mortgage Services helps first-time homebuyers discover the different possibilities in home buying, get pre-approval letters, obtain assistance for refinancing, debt consolidation, and more. Looking for a mortgage? Apply online today!